Over the last month I received 4,542,695,355,213,101 (plus or minus a few) with this exact question:
“Peach, I just don’t know where to start”
I will start off by apologizing because I guess I really forgot to mention it. For Andrea and I, it feels similar to someone asking us how we tie our shoes. We have been doing it so long, it has become automatic. However it is important, it is on your minds, and you are important to me because you are here reading. Thank-you by the way. Seriously, thank-you! If you are asking yourself where to start, then congratulations – you’re already past step 1. Step 1 is the reason to change your financial future. Are you in debt? Are you wanting financial freedom? Do you want to be able to teach your kids/grandkids how to avoid the same money mistakes you have made? Or, are you just sick and tired of being sick and tired? These are just some examples I have seen with families we have coached along the way, and these very reasons are what will push you to win. Think of it this way: the reason you are creating change is the fuel in your paid for car. Without it, you are going to be….walking. Slowly. For a while. Then you’ll give up. Our reason? We were sick and tired of being sick and tired. Bills came in, the money went out, and we felt like a dog chasing its tail. It was embarrassing to see me running in circles in our back yard. Over time the tail-chasing became the norm – YUK! – and it also sucked. So, make sure you have your reason and make it visual. Take a picture of all the debt payment notices that come in and make an I HATE DEBT collage and hang it in your home. Take a picture of some place you want to go right now but you can’t and hang it in your home. Drive past your alma-mater and ask yourself if your kids are going to have student loan debt. Dream. Dream even bigger. Then wake up and START. Alright, we are going to get past the Coach Peach Rah-Rah talk and get down to the actual HOW TO START winning with money. But….how jacked up are you right now? Boom-Clap! Step 2: Give yourself a financial checkup. There are two parts to your financial checkup – money and behavior. The obvious one is money because the terms financial and money seem to always go together. Look over the past 90 days of your bank statements and see what you have been doing with money. It may scare you, but you’re a big kid – you can do it! Next, look at where you are spending money and ask yourself this:
Looking at the last 90 days of bank statements, does this accurately describe who I am or who I want to be?
Your Behavior with Money
Why are you behaving like this with money? Is this a symptom of a different problem? We all have a money blueprint, do you know yours? Check out How do you feel about money? and you may see familiarities with the way Andrea and I felt about money. Answering some of these deeper rooted questions is going to open up your mind and your heart, and this is where you are going to see the changes happen with your money. This is where passion and awesome join at the intersection of splendid and yippee, and your financial life starts moving forward at 1,000 mph!
Step 3: If you have been reading Money Peach at all, you will quickly understand how I feel about the BUDGET. It is an absolute must. Why am I so over-the-top about the budget? Because, we had tried everything to win with money and NOTHING worked until we finally gave in and got on a budget. It felt like a financial HIGH – we had crashed and burned so many times, and then one day – BOOM – we were off and rockin’ it! You cannot skip this step and expect to go from crap to awesome in money terms. I have a Budget Page at the top of this site and a 5 Steps to Budgeting Post to get you started. Please, please, please, do yourself a solid, and create your budget. No excuses.
You can also get your Budgeting Tools Right Here for FREE!
“A budget is simply telling your money where to go instead of wondering where it went each month”.
This is your game plan for financial awesome! Stick to your budget and you will notice DRASTIC improvements happening almost over-night. It is a game changer and will allow you to start feeling immediate change. I pinky-swear promise.
Once you are on a budget, you now have a plan. You can visually see how much you are overspending and figure out where you need to cut back. If you are financially stressed out each month, the chances of you overspending are 99.99999%. You are going to have to cut back somewhere. Separate wants and needs. You need water. You want TV. You need soap. You want botox. You need a way to get to work. You want a new Beemer. You need to get a way. Grab a snickers. Get the point?
If you are wondering if this is going to be hard – only if you want it to be. It is always your choice.
If you have made it this far, you have plugged the holes in your leaking bucket of money (Pretty neat metaphor, right?). You also just gave yourself a raise. Did you know money leaves those who don’t treat it well and goes to those who do? Which side are/were you on and which side do you want to be on? This is actually a rhetorical question. Duh.
Step 4: Begin winning here. Begin by saving money. Part of living on a budget is living on less than you make. When you do this, you have the ability to start PAYING YOURSELF FIRST. This is nothing new, it has been around for approximately 65 million years (T-Rex always paid himself first), but we just don’t do it very well. The United States is one of the wealthiest countries in the world with one of the WORST savings rates. This is terrible – Pay yourself first.
You need to save for 4 main reasons:
- Emergencies – They are going to happen, get ready
- Buying stuff – You are allowed to do this (when you have the cash)
- Wealth Building – Good ol’ wealth building. Doesn’t that just sound awesome?!
- Giving – This is #1 reason to save – so you can give some of it away. This is the most fun you will ever have with money and you won’t know until you try – Do it.
Depending on how much debt you are facing, depends on how much you are going to be saving. If you have a teeny-tiny bit of debt, then knock it out really quick and THEN start saving. If you are a doctor with $250k in student loans – you cannot wait that long to start saving. You need to live on A LOT less than you make and balance out saving and spending. Either way, you are building a financial foundation that will grow exponentially over time. Warren Buffet, Bill Gates, Steve Jobs, and Mark Cuban all started somewhere. They would never be where they are today if they didn’t start. Don’t you think you’re about ready to start winning with money? I know you are.
Does this help? Do you feel you can start right now? Realize this money thing is simple and also complicated. It is simple because most of the math is 5th grade math. It is complicated because our behavior with money is never black and white. There is always that “But you don’t my situation Peach”. You’re right, I don’t. However, I do know that choosing to start is something everyone can do. 3,2,1 Go.
Be good to yourself, your friends, your love, and BE GOOD TO YOUR MONEY!
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